esta3041 proy2 2
Project # 2
ESTA 3041
Due date: May 21, 2012
MERCEDES GOES AFTER YOUNGER BUYERS
Mercedes and BMW have been competing head-to-head for market share in the luxury-car market for more than four decades. Back in 1959, BMW (Bayerische Motoren Werke) almost went bankrupt and nearly sold out to Daimler-Benz, the marker of Mercedes-Benz cars. BMW was able to recover to the point that in 1992 it passed Mercedes in worldwide sales. Among the reasons for BMW’s success was its ability to sell models that were more luxurious than previous models but still focused on consumer quality and environmental responsibility. In particular, BMW targeted its sales pitch to the younger market, whereas
Mercedes retained a more mature customers base.
In response to BMW’s success, Mercedes has been trying to change their image by launching several products in an effort to attract younger buyers who are interested in sporty, performance-oriented cars. BMW, influenced by Mercedes, is pushing for more refinement and confort. In fact, one automotive expert, the focus says that Mercedes wants to become
BMW, and vice versa. However, according to one recent automotive expert, the focus is still on luxury and confort for Mercedes while BMW focuses on performance and driving dynamics. Even though each company produces many different models, two relatively comparable coupe automobiles are the BMW 3 Series Coupe 335i and the Mercedes C350 Coupe. In a recent year, the national U.S. market price for the BMW 3 Series Coupe 335i was $41,022 and for the Mercedes C350 Coupe $45,493. Gas mileage for both of these cars is around 17 mpg in town and 25 mpg on the highway.
1. Suppose Mercedes is concerned that dealer prices of C350 Coupe are not consistent and that even though the average price is $45,493, actual prices are normaly distributed with a standard deviation of $2,981. Suppose also that Mercedes believes that at
$44,000, the C350 is priced out of the BMW Series Coupe 335i market. What percentage of the
ESTA 3041
Due date: May 21, 2012
MERCEDES GOES AFTER YOUNGER BUYERS
Mercedes and BMW have been competing head-to-head for market share in the luxury-car market for more than four decades. Back in 1959, BMW (Bayerische Motoren Werke) almost went bankrupt and nearly sold out to Daimler-Benz, the marker of Mercedes-Benz cars. BMW was able to recover to the point that in 1992 it passed Mercedes in worldwide sales. Among the reasons for BMW’s success was its ability to sell models that were more luxurious than previous models but still focused on consumer quality and environmental responsibility. In particular, BMW targeted its sales pitch to the younger market, whereas
Mercedes retained a more mature customers base.
In response to BMW’s success, Mercedes has been trying to change their image by launching several products in an effort to attract younger buyers who are interested in sporty, performance-oriented cars. BMW, influenced by Mercedes, is pushing for more refinement and confort. In fact, one automotive expert, the focus says that Mercedes wants to become
BMW, and vice versa. However, according to one recent automotive expert, the focus is still on luxury and confort for Mercedes while BMW focuses on performance and driving dynamics. Even though each company produces many different models, two relatively comparable coupe automobiles are the BMW 3 Series Coupe 335i and the Mercedes C350 Coupe. In a recent year, the national U.S. market price for the BMW 3 Series Coupe 335i was $41,022 and for the Mercedes C350 Coupe $45,493. Gas mileage for both of these cars is around 17 mpg in town and 25 mpg on the highway.
1. Suppose Mercedes is concerned that dealer prices of C350 Coupe are not consistent and that even though the average price is $45,493, actual prices are normaly distributed with a standard deviation of $2,981. Suppose also that Mercedes believes that at
$44,000, the C350 is priced out of the BMW Series Coupe 335i market. What percentage of the